With the driver shortage, increased fuel prices, and new government policies that restrict hours of service on the road, truck capacity in Canada is a challenge.
Shippers are always looking for ways to lower costs and improve service.
Today's intermodal services do just that.
According to Jim Brown, owner, JSRB Logistics Consulting Ltd., "In many rail corridors, intermodal transportation provides a much better dollar value than highway."
Intermodal operations lowers transportation costs by allowing each mode to be used for the portion of the trip to which it is best suited.
An intermodal container makes it possible to change shipment methods—from truck to rail or ship—without individual freight handling. Freight can be efficiently shipped door to door.
Brown offers the following 12 tips for maximizing intermodal transportation efficiency:
1. Establish goals
Position your intermodal tactical objectives so they are in line with your corporate goals. The efficiencies gained from intermodal should support, and be recognized, in your company's business goals.
2. Research potential providers
Know delivery criteria your customers are looking for, and select transportation providers accordingly.
3. Review all components of a contract
It is not only about a lower rate when choosing providers. Other factors need to be considered such as reliability by schedule adherence, punctuality and sustainability are also important.
4. Standardize the dispatch process
Your intermodal dispatch team needs to work together efficiently and consistently.
Leverage your investment in technology and associated processes to ensure your intermodal network runs efficiently.
5. Make it easy for service providers
Be clear, and standardize what your business requirements are for scheduling, en-route data, proof of delivery and billing.
In times of tight capacity, the quality transport providers will gravitate to the transport buyers that are easiest to work with.
Standardize your business requirements for shipment acknowledgment, scheduling, en-route event capture, proof of delivery, and billing.
In times of tight capacity, quality transportation providers will gravitate to the transportation buyers that are easiest to work with and have the most knowledge.
6. Bring together all the connecting pieces of your intermodal network
Look at how you are connecting providers with data integration and process standardization consistency.
Having the transportation buyer and provider on the same platform gives a clear view of shipment data and service provider compliance.
7. Integrate data in both directions
Precise and integrated shipping data (from you or from your customers if you are providing a logistics role) will generate efficient transport orders and deliveries.
8. Collect and analyze data
Be sure to collect performance data for individual intermodal nodes.
You'll want to have your internal and external supply chain team agree on the data objectives from internal and external stakeholders so everyone knows what is being measured and why.
9. Step back and take advantage of data
Use data about lanes, modes, customers, and vendors when making decisions about your intermodal network, and identify efficiency opportunities.
You can look for efficiencies in revenue, cost, margin, hours, minutes, steps, stops, or calls.
10. Review the lanes you are using
Shippers need to determine which areas of the country their loads are coming into and going out of.
The longer the haul, the greater the opportunity for intermodal cost savings.
11. Acknowledge success within the network
Recognize and reward your vendor network based on performance.
By being easy to work with, measuring compliance, and rewarding performance with more volume, your intermodal network will see more efficiency in your supply chain team in the long-term.
12. Develop strong and lasting relationships throughout your supply chain
Successful intermodal efficiencies require strong relationships.
Advantages of intermodal transportation
- Generally, the longer the haul, the greater the fuel and cost savings provided by rail shipping. That's compated with the handling costs of transporting and transferring trailers and containers between trains and trucks.
With the advancement of rail shipping as a more reliable schedule, shipments can now be timed to allow a delivery to arrive at the precise time it is required. This cuts down substantially on storage costs.
Disadvantages of intermodal transportation
- While intermodal accepts loads of every size and frequency, getting delivery of just one or two shipments cross-country each year may prove too expensive or it may not be possible to take the freight at all.
- Although intermodal transportation offers the benefit of relatively low costs compared to other methods, it obtains this by sacrificing speed.
- Intermodal may be restrictive for some shippers due to longer lead times in crossing the country (rail takes much longer than by truck).
- Intermodal transportation is also subject to lower overall reliability due to its reliance on more than one mode of transit.
- As the chain of multiple modes grows, the possibility of any link in the chain breaking down also increases.
How about you? Do you have any tips to share on intermodal efficiencies?